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There aren't any small businesses anymore and for good reasons. The mom and pop shops are inefficient. They do not employ the highly efficient operational syste

by diskcat 11y ago

There aren't any small businesses anymore and for good reasons. The mom and pop shops are inefficient. They do not employ the highly efficient operational system that big businesses can employ so all your coffee shops are now starbucks or some other franchises. >Also these higher prices skew the economy. Pricing is how an economy works. It is the messaging system communicating changes in demand/supply balance. If it is 'skewing' the economy in the sense that it causes changes, then it is working as intended. >When people are tied up in these ever increasing loan/income ratios There is only so much land to go around so if you want to use a particular piece of land that is highly desirable then you ought to outbid everybody else. >I believe we should look to ensure affordable housing for owner occupiers. the solution to this is georgian land value tax. There is no reason otherwise to ensure 'afforable housing for owner occupiers' except your personal belief that society should subsidise a particular class of property ownership whereby the owners use the property directly. What is going to happen is that people who cant afford to own a house (or dont want to borrow money from banks to buy one) is going to have to pay the tax for renting.

Gustomaximus 11y ago
> Pricing is how an economy works. It is the messaging system communicating changes in demand/supply balance. If it is 'skewing' the economy in the sense that it causes changes, then it is working as intended. Price is one tool. Government skew pricing via subsidies and other to business all the time. Imagine primary schools in a pure capitalist system. It would be a mess. There is loads of intervention all through the economy that overrides pure pricing so I dont buy into this view. > There is only so much land to go around so if you want to use a particular piece of land that is highly desirable then you ought to outbid everybody else. Land supply is fixed. But demand is variable. If you reduce investment incentive for this limited land pool, prices should reduce via less competition freeing personal capital for other spending. > What is going to happen is that people who cant afford to own a house (or dont want to borrow money from banks to buy one) is going to have to pay the tax for renting. Maybe... 1) there were studies in Australia when the gov removed tax breaks on investment property. Some people made a claim similar to you this cost would be passed on. Empirical results were the majority of regions (some exceptions of course) found little to no impact on rental price and this cost was absorbed into investment returns. And 2) Don't forget this action will reduce house prices, so those that do buy residential property for investment will require lower rental return as the initial house price is lower.

by diskcat 11y ago

Gustomaximus 11y ago

> Pricing is how an economy works. It is the messaging system communicating changes in demand/supply balance. If it is 'skewing' the economy in the sense that it causes changes, then it is working as intended. Price is one tool. Government skew pricing via subsidies and other to business all the time. Imagine primary schools in a pure capitalist system. It would be a mess. There is loads of intervention all through the economy that overrides pure pricing so I dont buy into this view. > There is only so much land to go around so if you want to use a particular piece of land that is highly desirable then you ought to outbid everybody else. Land supply is fixed. But demand is variable. If you reduce investment incentive for this limited land pool, prices should reduce via less competition freeing personal capital for other spending. > What is going to happen is that people who cant afford to own a house (or dont want to borrow money from banks to buy one) is going to have to pay the tax for renting. Maybe... 1) there were studies in Australia when the gov removed tax breaks on investment property. Some people made a claim similar to you this cost would be passed on. Empirical results were the majority of regions (some exceptions of course) found little to no impact on rental price and this cost was absorbed into investment returns. And 2) Don't forget this action will reduce house prices, so those that do buy residential property for investment will require lower rental return as the initial house price is lower.